FERC expands review of Colonial rules
OREANDA-NEWS. September 14, 2016. The Federal Energy Regulatory Commission (FERC) today directed Colonial Pipeline to produce four years of documents discussing access to the 5,500-mile (8,851km) system connecting the US Gulf coast to the New York Harbor market.
In a sweeping review,FERC will investigate whether Colonial's practices are permissible under its regulations and the Interstate Commerce Act (ICA), agency staff said in response to a case challenging Colonial's handling of shipping history transfers.
The review will look at issues raised in FERC's rejection in July of Colonial's system for granting access to its long-constrained system, a heavily used conduit for Gulf coast refiners to access markets from Texas to the US northeast.The commission instructed Colonial to produce shipper manuals, communications and "all policies, practices, manuals, directives, memoranda or internal communications" dating back 1 January, 2012 that address the primary means for new shippers to gain access to the pipeline system.
"The commission is investigating the allocation of capacity on Colonial's system, including but not limited to history transfers, to determine whether that program and any related policy or program is consistent with the ICA," staff wrote. The commission will also investigate whether certain policies should be included in Colonial tariffs going forward.
Colonial had no immediate response.
Attempts to work around chronically constrained pipeline capacity have raised tensions between legacy shippers and new players pushing for access.
Colonial allocates its capacity based in part on a shipper's history of moving product across its lines. Such established, or Regular, shippers split 95pc of the common carrier's capacity.
New Shippers split the remaining 5pc or any other unused capacity. A tiered lottery system determines their access to that space. Shipping consistently would graduate that shipper to regular shipper status.
But the number of shippers vying for space has made such graduations difficult or impossible.
Some companies began trading their accumulated shipping history, pooling together to gain promotion to more regular access to the system. This has reduced space for regular shippers.
FERC in early Julyrejected a proposal that Colonial said would simplify access for new shippers and ease concerns of its legacy customers. Regulators said the proposals tilted too far toward protecting historic users.
Requests to reconsider specific changes in that tariff remain pending before the commission. Today's order came in a separate dispute over shipping history transactions that Colonial has argued was administrative and outside the jurisdiction of the commission.
Shippers Tricon and Rockbriar last May challenged a Colonial policy not documented in its tariffs that bars for 14 months companies that sell shipping history from participating in a lottery for new space.